Virtual Private LAN Service (VPLS) is generating considerable interest with enterprises and service providers as it offers multipoint transparent LAN service (TLS) over MPLS networks. This paper describes an effective technology - VPLS, which links virtual switch instances (VSIs) through MPLS to form an emulated Ethernet switch and build Scalable Transparent Lan Services. It first focuses on the architecture of VPLS with Ethernet bridging technique at the edge and MPLS at the core, then it tries to elucidate the data forwarding mechanism within VPLS domain, including learning and aging MAC addresses on a per LSP basis, flooding of unknown frames and replication for unknown, multicast, and broadcast frames. The loop-avoidance mechanism, known as split horizon forwarding, is also analyzed. Another important aspect of VPLS service is its basic operation, including autodiscovery and signaling, is discussed. From the perspective of efficiency and scalability the paper compares two important signaling mechanism, BGP and LDP, which are used to set up a PW between the PEs and bind the PWs to a particular VSI. With the extension of VPLS and the increase of full mesh of PWs between PE devices (n*(n-1)/2 PWs in all, a n2 complete problem), VPLS instance could have a large number of remote PE associations, resulting in an inefficient use of network bandwidth and system resources as the ingress PE has to replicate each frame and append MPLS labels for remote PE. So the latter part of this paper focuses on the scalability issue: the Hierarchical VPLS. Within the architecture of HVPLS, this paper addresses two ways to cope with a possibly large number of MAC addresses, which make VPLS operate more efficiently.